Wednesday, March 25, 2026, 9:30 a.m. (New York City time), Council Chambers - City Hall
Committee: Committee on Finance
The Committee on Finance, chaired by Council Member Linda Lee, held the final preliminary budget hearing on the administration's proposed $127 billion Fiscal Year 2027 budget, hearing testimony from OMB Director Solomon and his team. The director testified that chronic under-budgeting of roughly $7.5 billion in six areas plus $6.7 billion in unfunded cliffs required about $14 billion in agency expense changes, a $1.7 billion savings program driven by Executive Order 12 chief savings officers, and a remaining $5.4 billion gap closed by reserve drawdowns and a proposed property tax rate increase. Speaker Julie Menin and numerous council members questioned the administration on the rainy day fund drawdown, the property tax increase (which the Council opposes), consulting contracts, agency hiring restrictions, CityFHEPS litigation, libraries, NYCHA, immigration services, and other service priorities. No budget was adopted; the administration committed to share savings details and various reports with the Council, with many items deferred to the executive budget.
0:10 Thank you,
0:10 good morning and welcome
0:11 today's well, good morning and
0:12 welcome to today's New York
0:13 City Council hearing for the
0:14 committee on finance at this
0:15 time I would like to remind
0:17 everyone that sounds all
0:18 electronic devices. Also a
0:19 tthis point going forward, no
0:22 one is opposed to approach it
0:22 is no. One. Chi, we're ready
0:28 to begin. I love the
0:30 enthusiasm. Good morning,
0:31 everyone and welcome to
0:32 today's hearing of the
0:33 committee on finance on fisca
0:34 l, you're 27 preliminary budget
0:37 Council Member Linda leech,
0:39 our finance today, we conclude
0:41 our preliminary budget
0:42 hearings, and we will have the
0:42 opportunity to hear from
0:45 mayor's office of management
0:46 and budget or and at this time
0:48 I'd like to introduce my
0:50 colleagues who are present
0:52 this morning. We have
0:52 councilmember alda ball
0:56 councilmember marty
0:57 councilmember Avilés
0:58 councilmember Hanks and
0:58 Council Member Wong and I know
1:01 more are coming. So thank you
1:03 for being here so
1:04 . As we conclude this
1:05 preliminary budget season, I
1:06 would also like to extend my
1:09 sincere gratitude to the
1:10 dedicated stuff the cit
1:11 ycouncil finance division for
1:14 their tireless and I'll
1:16 emphasize tireless efforts in
1:17 preparing for today's hearing
1:18 this work doesn't happen on
1:19 its own and I want to
1:20 acknowledge the amazing team
1:21 of dedicated professionals who
1:22 make it all possible our New
1:26 finance director nathan toph,
1:27 director, rosenberg, deputy
1:32 director is end of kima, but
1:34 I'll be paul simone and right
1:37 chief economist at large in
1:39 nickel assistant directors ali
1:40 ali, julia harem, miss
1:42 florentine kabore, daniel
1:45 croup, James reyes jack's
1:46 story, paul sermon andrew
1:48 wilbur finance council
1:50 nicholas connell, my committee
1:51 counsel brian star photo
1:52 senior adviser at and many
1:54 ,many of the finance analysts,
1:56 economists and support staff
1:57 who have worked behind the
1:58 scenes to to bring everything
2:01 together and before I go any
2:02 further. I'd like to invit
2:02 eour leader, speaker Julie
2:04 Menin share her opening
2:07 remarks. Thank you so much.
2:08 Shirley and I want to reall
2:10 yecho your thanks to our
2:11 incredible finance team and
2:12 all of the hard work that they
2:15 put into our budget hearings
2:17 and the work ahead so good
2:18 morning, everyone. Good
2:20 morning director salman were
2:21 excited to see you and your
2:22 team and we look forward to a
2:26 productive hearing a this is
2:27 obviously our eleventh an
2:28 dfinal day of hearings on the
2:30 admin mons proposed $12
2:34 7billion prelim budget for
2:35 fiscal year 20 27 when this
2:38 budget process started, w
2:39 ewere initially told that we
2:41 had inherited a crisis, a
2:42 staggering $12 billion budge
2:44 tgap over to fiscal years.
2:47 However, by early that numbe
2:48 rbegan to shift with the
2:50 administration shrinking the
2:52 gap by roughly $5 billion t
2:54 oabout $7 billion, then within
2:56 days of releasing the
2:57 preliminary budget and thanks
2:58 to the support of governor
2:59 vocal the number change once
3:01 again lowering the gap over
3:05 two years. So the story of
3:06 this budget leaves us with
3:08 some fundamental questions
3:09 that must be answered. First
3:11 of all, what is the real size
3:12 of the budget gap and how do
3:15 we achieve a fiscally
3:18 responsible budget that, of
3:19 course, upholds our city's
3:21 obligation to all New yorkers.
3:23 These are the questions we
3:25 intend to investigate today so
3:25 that New yorkers can get a
3:28 more transparent picture of
3:29 the fiscal challenges that are
3:30 facing our City while the
3:34 preliminary budget is
3:35 technically balance that I
3:36 sonly because of a proposed 9
3:40 5% increase in the overall
3:41 property tax rate that would
3:43 raise roughly in New revenue,
3:46 but the council has been clear
3:48 on this issue from the very
3:51 beginning raising property
3:51 taxes is not on the table as
3:54 to do so in our opinion would
3:56 only worsen the affordability
3:58 crisis. Instead, the council
3:59 and its finance team have been
4:01 intently focused on
4:03 identifying areas of
4:04 additional revenue and savings
4:06 to fill in the remaining
4:07 budget gaps to that end at the
4:09 beginning of March to counse
4:11 lidentified nearly $1.7 billion
4:15 in potential revenue and
4:18 savings, including through
4:20 12000 vacancy accruals for
4:21 positions that the
4:22 administration had budgeted
4:24 for previously, but were left
4:26 unfilled at the end of
4:28 yesterday we were very pleased
4:30 to see that the independent
4:31 budget office issued a report
4:33 that confirmed the council
4:34 savings around those unfilled
4:37 vacancies, we believe then as
4:38 we do now that those
4:40 additional resources meant
4:42 that the administration's
4:42 proposal to pull money from
4:43 the rainy day fund in fiscal
4:47 20 26 could and must be
4:49 avoided. Also in early the
4:52 council's economic forecasts
4:53 ,estimated 386 million more in
4:56 tax revenue than projected by
4:58 the mayor's for fiscal year 2
5:03 026 and 20 27, reflecting a
5:04 stronger long term outlook for
5:04 the city's finances since then
5:07 . Throughout dozens of
5:08 hearings to review City agency
5:11 budgets, the council and its
5:13 finance team have continued to
5:14 dig under the surface of
5:17 agency budgets to identif
5:18 yother potential savings that
5:19 let me be clear without in any
5:21 way cutting critical services
5:24 and the council will continue
5:26 to pursue its mission until w
5:26 ereach an agreement with the
5:29 administration in on a
5:30 fiscally responsible balanced
5:33 budget that helps make our
5:34 City more affordable without
5:36 in any way cutting services.
5:38 So director solomon. We looked
5:39 very much look forward to
5:40 hearing from you and your
5:43 colleagues on the
5:43 administration's fiscal year
5:46 20 27 prelim budgets and how
5:47 your team intends to address
5:47 the budget gap. Thank you so
5:50 much and I now want to turn it
5:51 back over to charlie. Thank
5:54 you so much, speaker. Um, so
5:56 two weeks a, wego kicked off
5:58 our preliminary budget
5:58 hearings with the independent
6:01 budget office comptroller's
6:02 office and the department of
6:03 finance both and the
6:05 comptroller expressed concerns
6:06 with the city's economic
6:07 outlook and shared their
6:08 perspective on how the City
6:11 should make changes to ensure
6:11 the budget secures New New
6:12 York city's future. The key
6:13 focal point on the mayor's
6:15 budget proposal was that the
6:17 administration inherited an
6:18 underreported budget deficit
6:20 from his predecessor, the
6:20 speaker of my colleagues and I
6:21 have acknowledged that the
6:23 administration's efforts to
6:25 address chronic under
6:26 budgeting and take positive
6:27 for steps towards a more
6:28 transparent budget that
6:30 accurately and honestly
6:31 reflects the city's full scale
6:34 situation that is something to
6:35 be applauded and should not go
6:37 unrecognized, but we think
6:37 there is still more work to b
6:39 edone to other parts of the
6:40 budget to fully meet this
6:42 challenge to be short, we
6:43 think there's are still
6:44 several areas that are ove
6:45 rbudgeted and revenues that are
6:47 underestimated. That could
6:48 provide much needed resources
6:50 and these savings would allow
6:51 us to avoid drawing down on
6:53 the critical budgetary
6:54 reserves and avoid a crushing
6:54 property tax increase
6:57 objectives that I know bot
6:58 hthe council and the
6:59 administration share a New
7:01 yorkers are currently feeling
7:02 the strain of rising costs
7:04 with little relief in sight t
7:06 omeet our responsibility as
7:07 public officials. We must
7:09 avoid making conditions worse
7:10 before we can make them better
7:13 and we must continue the work
7:13 of right sizing the budget t
7:15 oreflect actual costs and
7:17 finding efficiencies in how
7:18 the City delivers these
7:20 critical services. The council
7:21 is confident that there are
7:22 unaccounted for revenues in
7:23 the preliminary plan and out
7:26 ears as well as additional
7:27 opportunities through improved
7:28 collections and intentional
7:30 grants and funds
7:30 reimbursements to make the
7:33 City Hall. The mayor's
7:34 directive toward agencies t
7:35 oidentify savings is a good
7:36 stuff forward, though we think
7:38 the administration can and
7:39 should go further and ensuring
7:41 the city's operations are a
7:42 sefficient as possible and
7:44 during our agency hearings
7:45 this past month, officials
7:47 highlighted efforts to
7:49 identify savings while the
7:49 full scope of these savings
7:51 has not been disclosed, it is
7:52 encouraging to see agencies
7:54 actively working towards this
7:55 goal and I know some of those
7:55 savings have been approved, so
7:57 we look forward to hearing
7:59 more about that, the council
8:01 still believes there are more
8:03 cruel than efficiencies
8:03 available to balance the
8:06 budget before resorting to
8:07 draining the rainy day and
8:08 savings funds and raising
8:10 property taxes,
8:10 and while looking to albany
8:11 for help is worthwhile. We
8:13 must continue to do more to
8:15 find immediate solutions
8:16 within our control to address
8:18 these shortfalls as under
8:18 budgeting is not a New
8:20 phenomenon and we have found
8:20 solutions every time the
8:23 preliminary budget makes an
8:24 effort to address some of the
8:25 many needs that New yorkers
8:27 continue to face amid the
8:28 ,childhood programs andin our
8:34 advancing the universal child
8:36 care agenda championed by the
8:37 council to help our families
8:40 ,safeguarding and strengthening
8:40 the city's social safety net
8:42 programs and exploring avenues
8:44 for implementing a more
8:45 progressive revenue structure
8:47 and despite these proposals
8:48 ,the budget still falls short
8:49 in how the City will build
8:51 reserves in the event of
8:52 further federal funding cuts
8:53 or potential revenue declines,
8:56 it does not clearly present
8:57 any efforts to generate
8:58 additional revenue and it does
8:59 not provide transparency and
9:00 the tracking and securing
9:03 reimbursements from state and
9:05 federal sources
9:05 . Our responsibilities to
9:06 deliver a budget that protects
9:08 the economic safety of our
9:09 City and meets the needs of
9:11 all New yorkers we remain
9:12 committed to funding early
9:14 childhood education, public
9:15 safety and investments that
9:16 make life more affordable
9:18 while ensuring transparency in
9:21 management. Balancing the
9:22 budget cannot come at the
9:23 expense of our children,
9:24 seniors, working families or
9:26 essential workers and honest,
9:27 transparent budget will hel
9:28 pus protect those services,
9:31 affordability and uphold our
9:32 responsibility as fiscal
9:35 stewards and before actually
9:37 want to hear. Also, I just
9:39 wanted to recognize a few more
9:40 of my colleagues that have
9:42 joined us council, Maloney
9:44 councilmember Brewer,
9:45 councilman bill Felder, deputy
9:47 speaker Williams counsel
9:50 member luis and thank you one
9:57 .oh , and Council Member of
9:57 scene. Sorry and council
9:58 member Hudson did I call you
10:00 before? No. Okay,
10:01 either way, I'm going to do
10:03 it again. Thank you so much.
10:06 Um, and at this time I will
10:08 turn it over to committee
10:10 counsel to swear in our
10:12 witnesses a me and yeah, sorry
10:18 . Good morning to you all
10:18 affirm to tell the truth, the
10:20 whole truth and nothing but
10:21 the truth before this
10:23 committee and to respond
10:24 honestly to Council Member
10:25 questions right hand,
10:30 yes, I do, you begin. Sorry.
10:41 Oh. Oh, sorry. Go ahead
10:46 . Yeah, good, sorry. Good
10:48 morning speaker man in charlie
10:51 leader car members of the
10:52 finance committee and all
10:53 members here with us here
10:53 today. My name is should leave
10:57 . So the man and I am the
10:58 director of the mayor's office
10:59 of management and budget.
11:01 Thank you for the opportunity
11:03 to testify today about the
11:05 preliminary budget for fiscal
11:06 year 20 27. I am joined today
11:09 by first deputy director,
11:11 terrible berard, senior deputy
11:13 director latonya mckinney,
11:15 deputy director joshua
11:16 goldstein, deputy director
11:18 nathan gustaf and deputy
11:20 director patrick stefano and
11:24 I'm also joined by this
11:25 wonderful team of oh and b
11:26 eprofessionals behind me who I
11:28 have the privilege to work
11:29 alongside each and every day
11:33 .let me begin by expressing my
11:34 appreciation for the
11:36 partnership between this
11:37 institution and the
11:38 administration and ensurin
11:40 ggovernment works on behalf of
11:41 New yorkers my career in
11:43 public service has always been
11:45 guided by collaboration
11:47 consensus building and mutual
11:48 respect and I look forward t
11:50 oworking with the City Council
11:51 and the coming months to
11:54 achieve a fiscally sound
11:57 budget when Mayor mamdani took
11:58 office. He me to assess the
12:01 city's finances amidst
12:02 repeated claims by fiscal
12:04 monitors that known expenses
12:06 were not adequately budgeted
12:08 after reviewing the monitor
12:11 reports analyzing major cost
12:13 centers and pressure testing
12:14 fiscal cliffs with subject
12:18 matter experts. It was evident
12:19 that significant under
12:20 budgeting had in fact occurre
12:22 d, and it was prevalent across
12:24 many areas social services
12:28 education, core operations and
12:29 more the chronic under
12:31 budgeting meant a gap that
12:33 existed in the current fiscal
12:35 year, which was reportedly.
12:37 Balanced and that the fiscal
12:37 year 20 27 gap was far higher
12:41 than the $4.7 billion stated
12:43 in the November 2025 financial
12:48 plan update our initial
12:50 assessment was that the actual
12:53 budget gaps we're in line with
12:54 what the City and state
12:56 controller's had estimated t
12:59 oillustrate the extent of the
13:01 under budgeting, consider six
13:03 areas that had been
13:05 chronically underfunded by
13:06 roughly seven and a half
13:08 billion dollars over fiscal
13:09 years 20 26 and 20 27. Those
13:12 six areas are cash assistance,
13:15 rental assistance shelter
13:17 costs due process cases,
13:18 judgments and claims and the
13:22 City subsidy to the
13:25 specifically over the two